How parents can help kids make dollars and sense

To help children learn to be financially responsible, parents need to give them money, teach them the basics and then give them the freedom to learn from their mistakes.

"It's not easy, and it's as much of a learning experience for the parents as the kids," said Laura Fisher, director of American Bankers Association Education Foundation and mother of Jack, 6.

When her son was 8, Jayne Pearl started giving him an allowance.

"He just couldn't wait to experience spending it, and it meant nothing," she said.

So she gave him more. Pearl decided to give her son a larger allowance, but the catch was she no longer gave him lunch money. He could now choose to buy a school lunch or make his own lunch and keep the $2 he saved. He figured out pretty quickly that by making his own lunch, he could afford a CD every week and a half.

Gradually she added more money, letting him make choices about guitar lessons, school clothes and more, said Pearl, of Amherst, Mass., author of "Kids and Money."

Economics 101: Mom and Dad should take their paychecks and their child to the bank, cash the check and bring the cash home, said Chris Rockey, PNC Bank's manager of community development banking in Central Pennsylvania. Put the money on the table. Set out the mortgage slip and bills and receipts for groceries, electricity, cable, sewer, etc. Put enough cash on each bill to pay it. Your children will see where the money goes.

"It hits home about the cost of living, Rockey said. "It puts in perspective that it costs money to live in a house and for electricity, groceries. It's a very holistic way of teaching money management." Kids as young as first grade will get the picture, he said.

For more tips on how parents can teach their children about money, see Monday's Patriot-News.

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